The ATO has released taxpayer alert TA 2014/1. It describes trusts that engage in property development and questions whether the proceeds are on capital account or rather on revenue account.
However, there is something that the taxpayer alert does not state: the alert broadly has no application for an SMSF!
Consider an SMSF that runs a business. (For more information about SMSFs and businesses, see this article that I wrote some time ago for my column in Profession Planner Magazine: http://www.professionalplanner.com.au/superannuation/2010/12/01/minding-your-own-business-6053/.)
Even such an SMSF should still get to treat the proceeds on capital account. This is typically the case even if the real estate was trading stock!
However, there can be certain traps. We’ll be discussing this in more detail in the upcoming SMSF Strategy Seminars. To register, or for more details, see http://www.dbanetwork.com.au/dbalawyers/seminars3/face2face/SMSF-Strategy-Seminars.html
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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional.